Founders’ Biggest Pitch Mistake

Never miss a post! Subscribe!

Every day, from demo days to pitch competitions, from LinkedIn messages to e-mail, I see hardworking founders making the same mistake. If you’re raising money today, chances are you’re doing it too.

No trend = no interest

A lot of what venture capitalists and angels are doing when they evaluate a startup is trying to find a trend. Is this company’s product catching on at warp speed, or languishing in a dusty corner of the market?

It’s the founder’s job to show us that trend. But all too often, pitches are long on ideas and short on numbers.

You must show rapid growth in revenue or, at the very least, unpaid users. But in most of the presentations I see, there is no such data at all.

Next, I ask the same question, over and over: “What is your revenue month by month for the last 3 months (3 numbers)?”

That’s when at least 80% of founders make the same mistake: giving me a single, aggregate number for the last 3 months. This does nothing to show investors a trend.

If you made $210,000 in the last 3 months, that could be $70,000 every month. Or it could be $40,000 in October, $60,000 in November, and $110,000 in December.

That’s the difference between 0 growth (appealing to almost no one) and 66% month over month growth (appealing to anyone sane).

If your growth is amazing, don’t hide it by offering up just 1 number or no numbers at all! And if it’s not, be honest about it and do your dardnest to improve it.

Investors will appreciate and remember your candor and your commitment to giving them the information they need.

I can’t emphasize this enough: without data showing a growth trend, it’s almost impossible to say whether I’d want to invest in a company or not. So guess where those pitches go?

Yep, next to the Old Navy ads and the e-mail from Svetlana seeking a husband.

There are simply too many startups doing things right for me to spend a lot of time on those that are doing it wrong, given that I am looking at 100+ pitches a month.

Arm yourself with this information and raise millions! 🙂

Never miss a post! Subscribe!

More on tech:

Cana: The Star Trek Replicator for Beverages

Why I Just Invested in Deft, the Best Way to Shop Online

Why You Should Never Raise a $100 Million Seed Round

Photo: “Head in Hands” by Alex E. Proimos is licensed under CC BY-NC 2.0

If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been great so far.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.

Every fruit and vegetable is super fresh and packed with flavor.

I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. 

2 thoughts on “Founders’ Biggest Pitch Mistake”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s